ryochiji's blog

OSCON: Economic Nonsense

Talk by Ken Beck (creator of extreme programming, JUnit, and others)

For the most part, his talk was about how to make money while working on Open Source projects. He started by arguing that the Open Source model was unstable because it made no economic sense. He calculated the potential monetary value of his software (in terms of increased productivity, time saved, etc), and showed how what he actually got out of it was practically nothing in comparison.

Personally, I would disagree with his assertion that Open Source make little economic sense. It doesn't make sense in a monetary economy (or a capitalist/market economy), but it makes perfect sense in a reputation economy, and is therefore not inherently a unstable model. When I asked him about that, his reply was "alright, so we're getting paid in toothpicks... but that still doesn't pay my daughter's tuition."

His way of putting it added an interesting twist to my question, because then it would seem as if the Open Source "market," so to speak, is a market that has its own currency (reputation), and the real problem is that our currency has very little value compared to hard currency. That puts this problem back into the realm of a monetary economy, and so the problem we face might be similar to the kinds of problems many developing nations face.

Ultimately, I think the main problem is that our entire market segment, Open Source software and its developers, are currently severely undervalued. I think there's this bias against OSS that's preventing corporations and governments from investing in it, not entirely dissimilar to how developed nations may be reluctant to invest in a rising developing nation that faces considerable threats. When viewed in such a light, I think the ultimate solution is for the OSS world to make it clear that, 1) OSS is comparable, if not superior, in quality compared to commercial software, 2) OSS projects and developers need funding, 3) funding OSS projects has long-term benefits.

At the end, I doubt much will change, and we'll be left to beg, steal, or scavenge just to keep writing software that people can use. I think it's entirely possible that the real inherent flaw is in capitalism, but that's just my inner pinko commie speaking.
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posted at 16:02* [776 comments | View | Add Comment ] [PermaLink] [Trackback]

-How do you "value" OSS
-There are costs but  not profit --> motive?
-Maslow's Hierarchy of Needs
	-survival -> love -> esteem -> self actualization
	-Open Source goes the other way
		-starts with doing what you want
		-you earn respect
		-form relationships
		-but not survival!
-price
	-price a seller sets is a statement of worth
	-price a buyer pays is  statement of perceived value
	-we think we are making items of value
	-monopolization of the software industry suppresses expressed value
-accountability
	-there is accountability.. sort of 
-why does it work?
	-we live in a land of plenty
	-people are willing to sacrifice basic needs to get higher needs met
	-there's excess energies
-want to make money....
	-sponsorship
	-patronage: rich people to sponsor work (pubsoft.org?)
	-pay-per-use
	-licensing 
	-complements
-reputation economy:
	-OSS like a world where toothpicks is currency
	-low exchange rage, how do we improve rate?